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Healthcare

Today, we are releasing our 6th annual UPS Pain in the (Supply) Chain survey, conducted by the research firm TNS. The survey reveals insights into the top challenges facing global healthcare logistics executives and highlights their future investment plans. This year we added new geographies to the survey and probed deeper to uncover strategies that successful healthcare executives are implementing to overcome their top supply chain challenges.

The concept of disease was first introduced by Hippocrates more than two thousand years ago [1]. 1. Hundreds of years later, pioneers like Louis Pasteur and Robert Koch demonstrated to the world how a microscope can identify of the causes of diseases. Today, Clinical Lab is a $50 billion industry in the United States alone and medical diagnostic testing influences 70% of all healthcare treatment decisions [2].

The 21st century Clinical Lab exemplifies the rapid pace of implementing advances in technology and science to facilitate the efficient and accurate diagnosis of medical conditions. For example, tests which were unimaginable a few years ago, are routinely completed in just a few hours today.

Surprisingly, one of the biggest challenges in healthcare over the past five years has been a shortage of pharmaceuticals. From 2006 to 2011 drug shortages grew by 400%.[1] It is now a common practice for hospital pharmacies to maintain lists of which pharmaceuticals are available for physicians to prescribe.

How long did you spend in the waiting room for your last visit to a doctor? Until the 1950’s, house calls comprised forty-percent of all physician-patient encounters.[1] The tradition of house calls can be traced back thousands of years as evidenced by citations in Homer’s Iliad and Odyssey.[2] As a time honored tradition, the house call offers many benefits; however. By 1980, the concept of house calls was all but extinct with less than one percent of patient encounters occurring within the home.

Americans have always been fascinated by what happens in hospitals. From Marcus Welby, MD to E.R., the inner workings of hospitals keep TV viewers enthralled. St. Elsewhere and Grey’s Anatomy shifted the theme from saving lives at all costs to saving lives while keeping the doors open.

Historically, hospitals have had noble intentions: to save lives and maximize positive clinical outcomes. However the fiscal reality is that hospitals have been forced to balance providing quality care while trying to maintain profitability. Not many are successful. In fact, 61% of US hospitals are operating unprofitably. For many hospitals operating costs continue to rise while reimbursement rates fall.

A famous saying in both politics and business is “demographics are destiny.” Demographics provide a picture of what a society looks like today and can also be used to understand trends that change a population over time.

A good example of the way that demographics can change a society is in the generation born after World War II. After the declining birthrates of the 1930’s, there was a huge increase in family growth as soldiers returned home. More than 50 years ago, Business Week coined the phrase “Baby Boomers” to describe the twelfth, and largest, generation born in America of 77 million who’ve been since then called the “love generation,” “me generation,” and as they enter retirement, “the Gray Tsunami.”

In 1992 Nike produced their award-winning “Bo Knows” campaign, featuring the amazingly talented Vincent Edward “Bo” Jackson. Bo was the first athlete to achieve All-Star recognition in two different sports: football and baseball.

But, Bo’s future as an athlete became uncertain in 1991, when he was tackled and sustained a devastating hip injury. His football career ended, and he missed the 1992 Major League Baseball season to have hip replacement surgery. Though Bo never waivered in asserting that he would return to baseball, many doubted that it was a realistic goal.

Instead of dropping Bo as a spokesman, Nike paired him with comedian Denis Leary, who went on to obnoxiously challenge the audience to reflect on the fact that they’re sitting on the sofa while Bo and his new hip are out cross-training.

And Bo answered Denis’ sneering narration by returning to the baseball diamond, hitting a home run on his first-at-bat, the first of 16 homers he would deliver in his first post-surgery season. Nike printed a full page ad reading “Bo Knew”.

In the movie “Talladega Nights” the main character, Ricky Bobby, prefers to have his arm broken rather than to admit that he likes crepes. He confesses a love for thin, tasty pancakes but conceding to liking something called a “crepe” is just too much for him to handle. Why? Probably the same reason I walk past and ignore the “non-fat” items in a grocery store. Because words matter and they elicit positive and negative reactions due to the perceptions they words imply.

I have seen similar reactions among some logistics professionals when discussing Green Warehousing. Immediately their minds race to expensive facility changes, re-training, and yet another process or program that they will be required to certify and track. What some of those professionals may not realize is that the elements emphasized in green warehousing are the same principles they have practiced their entire career, albeit under a different name. Making your facility green may not require a drastic transformation in your mindset, simply a re-labeling of your activities, taking it one step further, and then taking credit.

Recently, UPS partnered with bioCSL, based in Australia, Laos Ministry of Health, and others to deliver nearly 100,000 doses of flu vaccine to Laos, where flu season was fast-approaching. The Laos Ministry of Health administered the flu vaccine to people at high risk of flu-related complications including pregnant women and people over fifty. Laos is not only extremely remote, but the flu vaccines must be kept within a strict temperature range throughout transport of 2°- 8° C.

The healthcare industry in China is on the rise. Factors such as a growing middle class, a large aging population and greater instances of chronic disease, combined with the Chinese government’s commitments to healthcare investment and reform have attributed to this growth. Chinese government spending on healthcare increased by 27 percent in 2012. And, in 2011, China overtook Germany to become the 3rd largest pharmaceutical market with estimated value of $64 billion. By 2015, China is forecasted to be the 2nd largest market in Asia overtaking Japan in this space.